2025年第二季度收益的初步侧面信息-较弱的信贷可能是潜在主题

John Aiken, CFA * | Equity Analyst(416) 847-7376 | jaiken@jefferies.comJoe Ng, CFA * | Equity Analyst(416) 847-7396 | jng4@jefferies.comAria Samarzadeh, CFA * | Equity Analyst(416) 847-7398 | asamarzadeh@jefferies.com (Continued from cover page)Of the remaining banks to report, we estimate total provisions for credit losses will jump from Q1levels, up over 28% sequentially and up approximately 59% from a year ago. We estimate that thehigher sequential credit losses will be weighed by an increase in Stage 1 and 2 performing creditlosses, rising over 86% from Q1 (and up approximately 112% from a year ago), while Stage 3 impairedloan losses ease, down roughly 6% sequentially but up over 21% from a year ago.Revenues (Consolidated): Overall, reported top-line growth, which included the net gain on thesale of its Schwab stake, jumped 63% from Q1 and up 66% from a year ago. On an adjustedbasis, revenues were up 1% sequentially and up 9% year-over-year. Adjusted net interest incomestrengthened (+3.6%) from Q1, while weighed by weaker capital markets revenues, non-interestrevenues eased, down 2.5% sequentially. Of the remaining banks to report, we estimate net interestincome will retrace, down 5.6% from Q1, albeit, up over 11% from a year ago, while non-interestrevenues ease, down 3.2%, but up approximately 12% from Q2-24. Further, TD's weaker CMRevperformance could temper expectations of a surprise to the upside for non-interest revenues.Expenses (Consolidated): On an adjusted basis, non-interest expenses were held relatively in checkon a sequential basis, down 1% from Q1 but up 12% from a year ago. The decline in NIX benefitedfrom lower salaries and employee benefits, along with a reduction in occupancy costs. Of theremaining banks to report, aided by the shortened quarter, we estimate non-interest expenses willbe held in check, relatively flat from Q1 levels, albeit, up 11.6% from a year ago.Domestic Banking: In TD's Canadian P&C, net interest margins increased by 1 basis point whileaverage loans were up 0.3% (up 3.7% from a year ago). Weighed by the shortened quarter, earningswere down against the first quarter on lower revenues, and negative operating leverage. Whileimpaired provisions declined, this was offset by higher provisions on performing loans, resulting inoverall credit losses trending higher. Overall, we anticipate the modest, but still positive loan growthwill likely also resonate across the group, while margins could garner varied performances. Thatsaid, we believe there will be relative outperformances within the 'Big 6', with RY (boost from HSBCCanada) and NA (acquisition of CWB) likely setting the pace amongst its peers.Non-Domestic Banking: South of the border, TD's U.S. Retail net interest margins were up 14 bpswhile average loans were up 0.3% sequentially and 3.7% from a year ago (down 3.1% on both periodsin USD). Core earnings declined sequentially, despite essentially flat revenues, provisions (as higherperforming were offset by lower impaired) and expenses because of the declining contribution fromSchwab based on the sale of the shares during the quarter. Of the remaining banks to report, whileTD's robust margins could be bank-specific, we believe the stable loan performance could bode wellfor the Canadian banks with U.S. retail and commercial banking operations, including CIBC's U.S.Commercial Banking and Wealth Management and Royal's City National platforms.Capital Markets: Following a robust Q1, capital markets revenues (CMRev) ebbed to close outthe first half of 2025, easing 1.5% sequentially but still coming in north of $2.1 billion, and upapproximately 14% from a year ago. The modestly weaker sequential Q2 performance was weighedby lower trading revenues (-5% Q/Q) and easing advisory fees (-4% Q/Q), but partly offset by strongerbrokerage commissions (+3% Q/Q). Of the remaining 'Big 6' banks to report, we are forecastingCMRev will fall roughly 7% sequentially, but rise over 23% from a year ago. That said, we believe therecould be relative outperformances across the 'Big 6' banks. Based on league tables, we estimateCM and RY (leading financing deal participation) and NA, BNS, and BMO (highest completed M&Adeals by value) are setting the pace amongst the group.Wealth Management:In TD's Wealth Management & Insurance segment, earnings were up on asequential basis from strong insurance contributions and lower expenses. The contribution fromtraditional wealth management was down in conjunction with .8% and 2.5% reductions in AUAPlease see important disclosure information on pages 4 - 8 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. and AUM, respectively. Of the remaining banks to report, we anticipate Royal's global wealthmanagement platform will likely outperform the group, while NA could receive a modest bump fromits acquisition of CWB.Capital: Buoyed by the added boost from the sale of its Schwab shares, TD's CET1 ratio jumped